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The Kudlow Report

News/Business. Larry Kudlow. Larry Kudlow provides his unique perspective on business, politics and investing. New.

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Us 15, Washington 8, Citibank 5, John Kasich 4, Kudlow 4, United States 4, America 4, Sweden 4, Jack Lew 4, Obama 3, Chuck Hagel 3, Jay Timmons 3, Europe 3, Warren Buffett 2, Legalzoom 2, Geico 2, Dell 2, Dan 2, Tim Geithner 2, Canada 2,
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  CNBC    The Kudlow Report    News/Business. Larry Kudlow. Larry Kudlow provides his  
   unique perspective on business, politics and investing. New.  

    February 14, 2013
    7:00 - 8:00pm EST  

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more "likes." more tweets. so, beginning today, my son brock and his whole team will be our new senior social media strategists. any questions? since we make radiator valves wouldn't it be better if we just let fedex help us to expand to new markets? hmm gotta admit that's better than a few "likes." i don't have the door code. who's that? he won a contest online to be ceo for the day. how am i supposed to run a business here without an office?! [ male announcer ] fast, reliable deliveries worldwide. fedex. [ male announcer ] fast, reliable deliveries worldwide. try running four.ning a restaurant is hard, fortunately we've got ink. it gives us 5x the rewards on our internet, phone charges and cable, plus at office supply stores. rewards we put right back into our business. this is the only thing we've ever wanted to do and ink helps us do it.
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make your mark with ink from chase. clamp. glitter. [ male announcer ] staples makes it easier to get everything your business needs. even custom banners. and now get 50% off banners and posters. staples. that was easy. i like to say there is always a bull market somewhere. i promise to try to find it just good evening, everyone. i'm layer ear kudlow. this is the "kudlow report." the democrats led by harry reid are finally coming out with their own sequester replacement
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packa package. surprise, surprise, it's got a $54 billion tax hike. the plan looks dead in the water anyway. it's never going to pass the house republicans majority. we got 14 days to go on the sequester kicking in. i say bring it, it's time to cut spending. >> meanwhile, president obama is out on the campaign trail pushing his state of the union spending plan, which frankly also has no chance either. we're about to talk with a business leader ewho says the president stay put, work on corporate tax reform and pass a balanced budget. and the nightmare continues for the passengers on the disabled vessel in mexico. and the attacks on the company and the carnival ceo are just beginning. we're going to have the latest. the "kudlow report" begins right
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now. all right. first up tonight, the democrats actually now have their own sequester plan. believe it or not. no budget but a sequester plan. let's get all the details from hampton pearson. he is live for us. >> good evening, larry. senate democrats have a plan but it looks like a nonstart with her congressional republicans. the plan, replace one year of the sequester with a combination of defense cuts, domestic cats and more tax hikes. it includes $27.5 billion in defense cuts but they wouldn't start until january 2014 and be phased in over the next seven years. farm subsidies would be cuts. there are calls for repeal of some big oil tax breaks. almost all of. new revenue would come from implementing the so-called bu
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buffett rule. no surprise ash statement from the white house this afternoon, the press secretary endorsing the senate democrats' approach. house speaker john boehner says if and when the senate passes a bill, he'll able to take a look at it but republicans in both houses already on record opposing calls for new revenue as part of any plan to assert the sequester and as we see in this proposal, democrats just as adamant about including a revenue profession revenue proposal. meanwhile the congressional budget office warning everybody that as many as 750,000 jobs could be lost this years if that happens. larry? >> hampton, correct me if i'm wrong. i know the defense thing is stretched out from 2014 to 2023. it's much, much smaller than the original cut. if i'm not mistaken, the rest of the spending cuts, of which there's 25 some odd billion,
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it's just one year, there's no more ten-year window. it's just one year; is that correct? >> that's my reading of it as well. >> joining me, diana roth and cnbc contributors dan greenho e greenhouse, jim pathkoukas. jim, is there a democrat, just give me one, what is wrong with this party? all they can do is raise taxes. >> the plan that was just outlined, these are permanent tax increases for temporary spending cuts.
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>> great point. excellent point. >> and it's also the worst possible kind of tax increase because it's a tax increase on investing. it's a tack increase -- what this will basically do is take the top capital gains rate which already went from 15 to 20, plus 4% for the health care reform, then take it up to 30%. that's going exactly the wrong direction. it's a damaging long-term tax hike in exchange for temporary spending cuts. >> ari, welcome back, buddy. i think you're out there someplace. i don't know if you heard my question to jim. is there a democrat in this country who can get it through his or her thick skull, i don't care if you have to use the manhattan or brooklyn phone book to find one who gets the fact you do not raise taxes when you're barely in a recovery. we grew 1.5% last year, the fourth quarter was
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contractionary, i do not understand your party. >> i want to wish you happy valentine's day, i'm definitely feeling the love. >> you should feel the love. this is never personal. >> jim said certainly personal, that's a tax on investing. a lot of people probably feel investing should be as easy and untaxed as possibly. but the buffett rule as defined goes to only the capital gains that come in as income as paid-for compensation. that's different from traditional investing. i don't think it hurts in the same way when we think about small dollar. those are people who are receiving compensation that way. >> it's still exactly the same. >> i thought investment was the seed corn to create the capital for in your businesses, which then create new jobs, which then give family income. am i wrong about this? >> no, you're absolutely right.
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we have people who still say it's okay to tax investment. we've already raised the capital gains tax rate from about 15% to about 24% at the top when you add in the new medicare tax to fund the health care bill. it would be irresponsible to raise it further, especially since gdp growth was negative in the fourth quarter. it might change due to the trade figures but our economy is not doing very well. >> the cbo says if you cut spending, you'll lose 750,000 jobs. i don't believe a word of that. dan greenhouse, show me a democratic budget document and i'll show officer tax hike. it's the darnedest thing i've ever seen. what happened to john f. kennedy? he was the first modern supply sider. he cut tax rates across the board and reagan followed it. what's wrong with these democrats? why don't they borrow from kennedy instead of all these other whacked out keynesian,
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whatever they are. >> he was brought to the right by others and eventually now we know him to be the great supply sider or think of him as such. >> why don't these guys get that? why don't they go back and read a little kennedy history? if kennedy were alive today, he'd be a republican, i'm sorry. i'm beside myself about these taxes. >> and plenty of people would tell you reagan would be a democrat. they're going to look at 30 years of lower tax rates, easier investment and so on and so forth and say this is but a blip in the radar, reversing the trend. >> you are a superb economist. how can you look at the shape of this economy and start talking higher taxes? i don't care what your philosophy is. you can't cut spending because you'll lose jobs. you can't raise taxes because you'll lose jobs. what is that they don't understand? what don't they understand? >> maybe they don't want the economy to grow. maybe it's ideology.
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maybe they want to punish the rich. there have been a lot of obama speeches like that. remember when he talks to the fat cats going to vegas. he never raises companies making profits. >> we're all going to take a trip to the cayman islands, where obama's new treasury secretary is. >> this wasn't the on big item on the senate's agenda today. they hope to end debate on chuck hagel's nomination and take one step closer to confirming a new defense secretary. but the vote foreclosure fell two votes short of the 60 required. that means they cannot move ahead and tonight mr. hagel's nomination is in jeopardy. ari? >> you have republicans who want to subject the leader of the armed forces to a super majority that we haven't seen before. number one, i'll tell you,
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larry, this is not going to stick, this is not going to hold. this is theater in washington. the republicans will relent because i don't think they want to leave us without a leader during war time. they are free to object and vote no but let's be clear, what they're doing now is bottling this up -- >> leon panetta is going to stay on. >> he's available. >> he may have to stay on for another year the way this thing is going. >> let's be clear. i think reasonable people should be able to agree on this. this is no way to pick a team, this is not in the constitution, which only has super majorities for certain specific instances for overriding a veto or international treaty. i think they will surrender. >> the senate has a role to play. if chuck hagel would have got -- >> what's it called? >> advise and consent. >> if he had been at all competent, this would be over. the problem is he had a bad performance and every day
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there's another speech, there's another video that comes out. that's what's killing his chances. they're letting him self-destruct. >> the biggest problem right now is the additional speech that came out that aei and nro highlighted but to jimmy's point, his performance was -- >> can i just read this? i want to read this to my pal ari how who is out there. just off the presses, he gave a speech to the american object institute, james zogby. i do not think he's a bad guy but that institute is highly anti-israel, always has been anti-israel and i reckon it always will. to top that off, they found out today, could have been yesterday, that chuck hagel running for president years ago, god forbid, at rutgers gave a
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speech where he said that the state department is an adjunct of the israeli foreign office. now come on. this guy cannot take his foot out of his mouth for the last ten years. that's the problem, ari. i agree with you. presidents deserve their cabinet choices but every once in a while you get a clunker like a john tower or somebody like that. this guy hagel is our current day john tower. >> i think we should stand up for the security of our allies, including israel, but he's not running to be and he's not appointed to be secretary of defense for the idf. he's here to be our secretary of defense and i personally have to tell you, larry, i don't have a problem with him standing up and talk about the political influences. i think his language has been inartful. if you want to go to the core
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point that the interests -- >> diana, ari is usually a very sensible guy but tonight he's completely lost his mind. i'll give you the last word. >> he didn't want to reveal the source of his funding to the atlantic council. when they get the documentation, they said they will rethink. he hasn't give them the documents. what does he have to hide? >> by the way, the vote today doesn't mean it's the last vote. ari may get his wish. >> john kasich is about to join us. he's been in us news for accepting medicaid money from the obama administration after john kasich opposed obama care. the governor of ohio is going to join us next up. free market capitalism is the best path to prosperity. don't forget, lower marginal tax rates across the board. all right? if you can't deal with reagan, think john f. kennedy, who
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launched a budget during the 1960s. why would you raise taxes now? i'm kudlow. we'll be right back.
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ohio republican government john kasich in the news these days. conservatives are heaping praise over his tax cuts but some don't like him taking expanded medicaid money from obama. conservatives, some of them, don't have any nice to say about john kasich at all. more or less you have 20% income tax cut across the board, joining a whole bunch of republican governors across the country who are leading the way while washington is raising taxes. the liberals of course i was reading the "columbus dispatch" and what not, they were saying tax cuts for the rich, that's all you're doing. >> larry, in addition to lowering the income tax so everybody doesn't scoot out of ohio, we're also providing a 50% tax cut for all small business, all pass-through entities, whether they're s corps or llcs.
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you got a business that makes $200,000, they exclude $100,000. >> on that point, why did you put add 750,000 cap? why cap it at all? if it's a successful small business person and you're giving them a very nice tax break, it would see you wouldn't want to cap for the incentive effect. >> we don't have the capability to do dynamic scoring here so we have to fit things into our budget. we're not done cutting taxes. we went to $2 billifrom $8 bill hole to $2 billion in sur applause plus. we have to reduce costs, keep regulations to a minimum and at the same time build our workforce. >> let me go to medicaid.
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you were very much opposed to obama care -- >> i still am. >> you've joined a small group of governor who is are taking the expansion from obama care. why did you oppose obama care and why does it now make sense for you in ohio to gone the medicaid dole? >> i didn't get into the state exchange and have them tell us what to do out here. i also don't believe in the individual mandate. at the same time, we're also going to control ability to regulate insurance inside the state of ohio by our people. but, larry, i've got $13 billion of ohio tax dollars that i can get back here over the next seven years to cover working poor, people who earn $15,000 or less. as a ceo of a state, you just don't turn that money down. it's our money, we usually don't get anything back. in addition to that, the federal government is going to cut off care for hospitals that don't get paid for people who show up in the emergency room. so that's going to put our
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metropolitan rural hospitals in a real bind when they can't get paid for uncompensated care. it's an important part of our community that they're strong and at the same time it also helps our level people be able to deal with the problem of m mental illness and addiction because they've been up against the wall and i want our money back here. >> that all sounds good but you're a former budget chairman. if the white house changes the rules and regulations on medicaid, it's going to cost you a lot more money in ohio. this is why many governors are shying away from it. >> well, first of all, first of all, larry, i'd say we've got a circuit breaker in here. let me also tell you people are worried about what's going to happen in seven, eight or nine years, i got to worry about what's going to happen tomorrow. if can i get this money back here and provide health care in a more comprehensive way, get people out. emergency rooms, it's going to save us money. frankly, bringing that money back is going to be a cushion against what's happening right
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now because of obama care. >> but you're not going into the exchanges, is that correct? >> no. and we're going to also be able to regulate our own insurance markets. i used to be a congressman, i was budget chairman, we balanced the budget when i was there. i know medicaid is on a perilous path. ultimately there's probably going to be a block grant. i can't worry about seven years down the road. have i to worry about what's happening now. it will help us to build a stronger economy in the state by having more rational health care and keep us from being hurt so much by obama care. >> let me ask you about the across-the-board spending cut called the sequester. it looks like they're going to go through with the sequester. coach be wrong. you may know more about it than i do. governor, from the standpoint of the state of ohio, can you take the sequester?
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does it matter now? would you like to see the sequester be implemented? >> i'd like them really frankly, larry, i'd like them to get together and to get something worked out that's rational. when i was there, tim penny answered did a penny out of every dollar. i also put the budget plan together in '97. across-the-board cuts are the last resort. you really want to pick and choose what makes sense but they seem to be grid locked down will. frankly partisan politics at all levels really threaten our future, larry. >> you're cutting taxes. your state is growing, your unemployment rate is coming down and as you just told us, you got yourself a surplus. so would i think you'd like to see the budget cutting sequester, since they never cut it in washington, maybe this is the right time to do it. >> we can't keep punting down the road. i'm not a very partisan guy. obama got -- the president got his tax increase. i mean, they got to do some spending cuts. what the heck are they doing
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down there? you got to get that budget -- if you can't control your budget and you're in the government, what the heck can you control? that's what it's so important for us to be balanced in the state. >> thank you so much, governor. >> always great to see you, larry. >> tim geithner made big errors filing his taxes, remember? the man he wants to be the second treasury has a tax shelter in the caveman islands. i don't think it makes them bad people but i do think it means we have a very bad and confusing tax code. unfortunately, jack lew is being hoisted on barack obama's class warfare pi tard. we'll talk about that a little later in the show. please stay with us.
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it looks like the cruise from hell is about to end for the 4,200 people aboard the carnival "triumph." it should make land in a few more hours but this will not be the end of the story for the company. we have a live report on this still developing story in just a few minutes. please stay with us. this is america. we don't let frequent heartburn come between us and what we love. so if you're one of them people who gets heartburn and then treats day after day...
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makes it easy for anne to manage her finances when she's on the go. even when she's not going anywhere. citibank for ipad. easier banking. standard at citibank. welcome back to the "kudlow report." in this half hour, this nightmare voyage is almost over. just a few more hours before the carnival "triumph" finally makes landfall but legal and financial woes for carnival could go on much longer. >> and do i blame jack lew for using a cayman island tax shelter to protect his so-called hard earned money?
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i really don't. but this whole situation puts the democrats who attacked mitt romney for doing the very same thing in an awkward place. we will look at democratic hypocrisy. first up, president obama on the road this week promising to be the champion of the u.s. manufacturing revival. my next guest has a message for him, get off the road and get to work in washington. jay timmons told business leaders in detroit obama's inability to compromise with gop lawmakers on looming budget cuts is causing manufacturers to pull back from hiring and their expansion plans. jay timmons, welcome back to the show. i'm shocked, shocked that obama gives a state of the union message and then goes out campaign style to sell it. i'm shocked. are you? >> well, quite frankly, we're very happy, larry, that the president is talking about manufacturing. we like it when anybody, republican, democrat in washington talks about manufacturing. we just want to see action. we want to see a growth plan put into place so that we can
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actually start creating manufacturing jobs. >> what kind of growth plans? obama wants to single out manufacturing. he wants to give you all tax credits if you open up plants in the united states, wants 15 hubs around the country for research center. i don't know what that means. what i want to ask you is what constitutes manufacturing today? it could be technology companies, they could be car companies, they could be materials companies. see, i don't even understand this. how do we know what is manufacturing and why it has to be located solely in the usa. i don't get that. >> we want it here because manufacturing has tremendous multiplier effect. every every dollar invested in manufacturing, another $1.48 of spinoff activity occurs and that filters throughout the economy and creates jobs -- >> how did you get that $1 hadn't 48 -- $1.48 number? >> that's cooked up by some
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pretty credible economists. that's a number that we're pretty proud of. in fact, it's the sector of the economy that is the most powerful and has the most powerful multiplier effect. >> so you must have loved obama's state of the union speech. i don't know why you're belly aching. the guy wants to give you tax tax credit if you open up some manufacturing plan but you must have loved this speech. >> i'll repeat this. i love it when folks focus on manufacture bug now the tough job starts. we need a growth agenda. the national association of manufacturers has an agenda, we focus on investment, innovation, trade and the work force. >> why shouldn't you focus on technology? why can't you focus on technology? >> hey, we're for it. >> why can't you focus on heinz food company, on airplane companies? in other words, i don't understand how it is -- i know you're with the national association of manufacturers, i
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know it's a fine group and i respect it and i'm pro business. i don't understand how you can just say we need manufacturing. we need a lot of things in this country and we need to do things in the most efficient way, which may mean producing something in mexico, assembling it in asia and running the final for sale in the united states. i don't get this protectionist -- >> no, i'm not talking about protectionism. we're saying we need to put the right policies in place so manufacturers want continue to vest here. right now it's 20% more expensive to manufacture in the united states than anywhere else in the world -- >> so let's lower the corporate tax rate. >> that's after you take out the cost of labor. >> yeah, let's lower it. that's a perfect idea. when the president talks about it, when republicans talk about it, they talk about lowering it to about 25%. that's actually not even the
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average of ocd nations and i don't think we became the great country we are today by striving to be average, larry. we need to take that corporate tax rate lower so that we can compete effectively with countries all around the world -- >> but for everybody. not just manufacturing. i want it for everybody. >> we agree. >> obama, if you can prove to him you're going to build a home grown factory, he'll give you a tax credit. or if one of your manufacturers, i'll bet you got a few of them, they got a stash of several hundred million overoverseas, because that's where they do business, obama will penalize them if they bring that money home. >> either through repatriatation or a territorial tax system. >> it should have been easy, it should have been pro growth and he didn't do it. >> taxes, regulation, work force, energy. those are the issues that really drive us. we want manufacturers in the united states but as long as we have the policies that we have
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in washington right now, they're not goung vest here. in fact, two-thirds of the manufacturers say that the climate in washington is such that they do not want continue to vest. >> i get that. jay timmons, thank you for being here. diana roth, jim pet koukis, what do you think of this? >> president obama doesn't count oil as manufacturing. he picks and chooses between good manufacturing and bad manufactures. >> am i wrong to ask the request about what constitutes manufacturing? i don't understand that. what's manufacturing? >> i don't think it's an unfair question. i think the larger story is why we're picking any one particular industry over another. at the end of the day, you want jobs to be created where they're going to be created and you doesn't want anybody picking that particular industry.
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i don't know why manufacturing is better than toy building or home building or anything else. >> it's picking winners and losers, isn't it? this is old line left-wing industrial policy. >> it is industrial policy, playing off this hazy nostalgia of america in the 1950s, 1960s. we're not going back to that. listen wees listen, we produce a lot, we just doesn't need as many workers. he is selling something that there's going to be millions of americans doing manufacturing injuri jobs. it's not going to happen. >> we have cheap natural gas. it is attracting back petro companies. shell is expanding. we can see positive effects of our lower energy priceprices. >> and wages are going up in
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china. it not so cheap. that's great if it's done through market forces. obama wants to penalize you if you're offshore and reward you if you're home. >> i don't disagree. let's not sit here and pretend like government policy isn't always about picking winners and losers. it's just are you picking the winners of the republicans side -- >> it's all wrong. it's all crony capitalism and i can't stand it. it's not free market capitalism. it's crony capitalism. it's political donations capitalism. that stuff infuriates me. the tax code should be low rates and all those deductions and special interest cronyism stuff should be abolished. >> a low-rate neutral tax code, let markets forces determine who the winners and losers are. it's never going to be perfect like that but it needs to be more like that. >> remember how much flak rick santorum caught --
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>> from me. >> among others. >> it's a throwback to what they remember from when all the cars were made here. that's not what we're going back to. >> why aren't soft drinks, why aren't food products classified as manufacturing? if you go through their whole process, they're going to run adjacent to manufacturing? i mean, everything is ma manufacturing. >> everything is manufacturing except for services that people do for you like cut your hair, folks. >> the scissor is manufacturing. when you go into the retail store, that's all manufacturing. where does that stuff come from? it gets manufactured. >> we need to generate ideas. that's where our wealth is, ideas. not putting stuff together. >> 25% tax rate maximum and get rid of all the crony capitalism -- >> canada's going down to 15. >> i'll go to 15. they do pay 10% -- >> canada is also getting rid of the penny. another good idea.
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>> no electricity, no bathrooms and it's all been going on since monday for more than 4,000 people aboard the carnival triumph." now we're told it's all over and we're about to get the latest in a live report. it's a story you got to hear. [ male announcer ] i've seen incredible things. otherworldly things. but there are some things i've never seen before. this ge jet engine can understand 5,000 data samples per second. which is good for business. because planes use less fuel, spend less time on the ground and more time in the air.
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the cruise ship nightmare is almost over. those passengers stuck on board with no power are being towed back to alabama. they should be there in just a couple of hours. nbc news's own jay gray is live in mobile, alabama. good evening, jay. >> hey there, good evening, larry. just when you think nothing else could go wrong, they lose the tow rope earlier today. really, i mean, this cruise, this voyage just continues to get worse for more than 4,000 people or more. take a look at the port behind me. this is where hopefully fingers crossed it's going to end up later this evening. a lot of activity here today. we've seen a lot of things moved in, generators, supplies, water, food, we saw a van full of wheel chairs come in to help some who can't get off of the ship when it ultimately makes it here. it's going to be after midnight now. we know that for sure. when it does finally get into the terminal here, it's going to
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take four to five hours for all the passengers to disembark. only one working elevator right now. that's going to be a struggle as well. there are medical teams at port, there are crisis counselors. they've already talked with some of the family members who are here to pick up their loved ones. about a hundred of those here. for the other passengers, they'll be loaded on to a luxury charter bus. one group of buses will go this direction, right back to galveston, texas. they'll make sure they get back to the point where this trip started, where it was supposed to end on monday. the other is the opposite direction, going to new orleans and it's going to actually take about 1,500 people to hotel rooms there. they'll get a chance really to unwind, decompress a little bit, they'll get a warm shower, which i'm sure they want and need, they'll get a chance to sleep in a fresh bed with fresh linens, a little built it of energy there 12 planes have been chartered to fly these passengers back to
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galvest galveston. they'll be taken back to houston to where it all started. a lot going on here. everything moving except the ship. it's still moving very slowly. it's going to be early friday morning before it's empty. >> jay, is the company at least giving them some money back? >> it is. it's reimbursing all of the fees for this trip obviously, the ticket price, the taxes. it's also going to cut them a check tofor $500, which doesn't sound like much given what they've been through and giving a deep discount for a future cruise but i don't think anybody is going to want to be near a ship for a long time. >> this is not good for the cruise business. jay gray, thank you for helping us out. >> getting back to my panel. do you want to go on a cruise? would you go on a cruise?
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>> i literally within the last 24 hours agreed to go on a cruise, in full knowledge of this. >> you were incentivised to do this? listen, i heard what was going on. i thought it sounded like a cracking good adventure. >> dan greenhaus, has this company gone bankrupt? >> i don't think they're going bankrupt. they've dealt with this for some time now, the incident in italy. people have been shot and stabbed and food poisoning. if you'regeneration, there's no shot you're going on a cruise. >> when was the last time you've been on a cruise? >> i have never been on a cruise. i was. >> on a cruise in the late 1990s. national review cruise. it was no fun at all. bill buckley was alive in those days, pat buckley was alive. i felt so cooped up. i never liked it.
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i felt cooped up. you maybe want to think this through, google up cruise and really do some serious research on it. >> and maybe can you get your money back. >> holy cow. >> can i go on? i want to move on. what does it tell you when people like tim geithner make big mistakes on their tax returns and jack lew use as tax shelter in the cayman islands? i think it means our tax codes are way to complicated and our tax rates are way too high and people in glass houses shouldn't throw stones. we'll debate that question next up on kudlow. my goal was to take an idea and make it happen. i'm janet long and i formed my toffee company through legalzoom. i never really thought i would make money doing what i love. [ robert ] we created legalzoom to help people start their business and launch their dreams. go to legalzoom.com today and make your business dream a reality. at legalzoom.com we put the law on your side.
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let's call this tax haven hypocrisy. president obama's newly elected treasury man jack lew has almost 60,000 bucks stored away in the cayman islands. remember during the election when mitt romney was pummelled by democrats for doing the same thing? here's one of the president's campaign ads attacking romney. ♪ america, america, god shed his grace on thee ♪ >> so let's bring in our panel for a little wisdom on this one. so this is obama being hoisted on his own -- can i just tell you, i don't care if lew was in the cayman islands investments as long as he paid his taxes but he's being hoisted on obama's class warfare petard. >> exactly.
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there's nothing wrong with doing any kind of legal tax investing. and many people do. they buy tax-free bonds, for example. but obama having gone against that, just the same way as he called fat cats in las vegas, for example. >> why season the immediaisn't something about this? this is not about jack lew, it's about the media not covering the hypocrisy of the obama administration. why aren't they tackling this? ooh, cayman islands? >> that's the eternal question. why aren't they applying the same standards to an administration that a lot of washington reporters feel let's say a great affinity towards. yeah, i think they're taking it easy. hypocrisy, listen, it's bad politics, it's bad economics. democrats keep saying that, you know what, taxes don't matter or they don't matter till they get up to 70%. maybe we're at the peak of the curve right now.
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>> i want to ask you, look, i don't hold any grudge against lew for doing this but he is being hoisted on a political petard. what does trouble me about lew is everyone tells me he was the guy against entitlement cuts, he was the guy for higher taxes and as the wall street journal editorial said today, he knows nothing about international financial, the dollar or currencies and that's why i don't think he's qualified to be treasury secretary, not the caveman islands. >> yeah. my particular worry is not the cayman island, as you noted. i think the big issue is that demonstrated over the course of his career. i'm sure he's going to do a perfectly good job -- >> how can you be sure? >> oh, come on. he's got a big bureaucracy -- >> he was pretending in his confirmation hearings not to know anything so he didn't say anything that would be held against him later. >> he's a big obama liberal. >> he is but he's very smart. >> i know he's smart. i hope he pays his taxes.
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let me go back to you, dan. what does it warren buffett purchase of heinz mean? >> i think it's very hard to make a larger argument about this. this was the dominant story of date obviously but muff likes dell situation, i think it's very much a one off. there was some bidding up of the other consumer companies, but this is a very big takeover, a warren buffett style company. i don't think you can make a larger argument about the heinz particular takeover. we're up to about $180 million of m & a in the first quarter. >> that's great. >> it's cooking. >> it also tells you money is very easy. it also tells you the m & a crowd, the private equity crowd, it's real cheap to borrow money to go and invest in these companies. >> there's a lofts cash sitting on the sideline. >> but jim pethokoukis, when you
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do gigantic m & a, do jobs go up or down? >> that depends on the deal. there's going to be some thinking that jobs are going to go down. >> diane, the same question. >> down. >> you're worried about job creation and growing the economy, m & a work? i'm a market guy, i'm all for it. i'm just saying you can't really clap and cheer in terms of job creation. that ain't going to happen. >> initially the jbs go down as the two enterprises merge and eventually chick growth goes up -- >> productivity goes up but it's not creating any new jobs. it's a little beef that i have. >> but if you have more efficiency, i mean, i take the u.s. air and american merger, maybe that will mean tickets go down, they'll travel more -- >> time-out, there's no chance
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ticket prices are going down. but the heinz deal or the dell deal, it's not a merger. it's totally private. >> what's that going to mean for jobs? it's worse. they're going to slash more jobs. i worked on wall street. i was there quite a while. i'm not against it. it's the natural order of things. have i no problem with it. i'm just saying for those people who treat about the statement of the economy and the labor market, m & a stuff does not create jobs. >> i'm not necessarily going to argue that is correct particularly in the case of the airline merger, you should see job losses and greater efficiencies. the airline industries have been in shambles -- >> has anybody ever made any money off the airlines? >> no. >> you are down to three or four major airlines, you're going to start to see ticket prices going up -- >> as long as there's freedom of entry, as long as we have
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southwe southwest, jetblue, they're not going to be able to raise their price as to high. >> i would never buy an airline stock but i'm not going to mention names. >> it's a very different world right now. again, it's a very different world. >> if you say so. i don't get it. jim pethokoukis, europe in recession. the numbers came out worse today. how bad is this european recession? what's it going to mean here to our economy and our stock market? >> it doesn't help. it doesn't help. we have europe and we've heard a lot about the austerity in europe. the part we hear less about is the tax hike part. there's already high tax regions and they are raising taxes further. >> like obama. >> as long as manufacturing hubs like germany, sweden -- >> i saw your piece on sweden and the nordic countries, that's great. they lowered the share of government and they lowered taxes. what did it do?
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how did the north countries do? >> it's been a wonderful supply side experiment. >> corporate tax and individual and they made their labor markets better and cut unemployment insurance. their unemployment rate is lower than ours. >> they're all smarter than the united states. we're raising taxes. >> the scandinavian countries are some of the most generous entitlement and social spending countries in the world but they're also one of the happiest. >> but sweden has a deficit -- >> they put a cap on it. >> they also have much more efficient government. more efficient regulation. it's a better run country. >> jobless claims went down. this is a good story. they don't get a lot of credit for this. they're down to 341,000. now, what does that mean? they have been trending lower. does that mean our labor market is in better shape than we
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think? >> we've been bouncing around 340 to 360,000 for a while. it's totally coincidence. at this point you really need to break down into the low 300s or above the 375, 380 level to make some sort of a larger observation. right now we're in this slow growth, steady improvement -- >> you were the chief economist of the labor department. how do you look at the jobs market now? >> it's still very poor, very weak. numbers bounce around from week to week. it shows job hiring is down. >> i was hoping it would be more optimistic. >> that's it for this evening's show. i'm larry kudlow. keep on watching. i love this story about the nordic countries, sweden, norway, germany. all they're doing is lowering tax rates. why can't we do that? i'll see you tomorrow night.
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